Analyst: YRC bankruptcy is

The Overland Park trucking company’s ongoinbg negotiations with the union are at riskof failing, analys Art Hatfield said in a note. “Given the developmentzs with the negotiations between the two parties and the increasinb uncertainty pertaining to the outcome of those we believe a bankruptcy at YRC Worldwide is still likelhy in the nearto mid-term,” he wrote. While the parties have kept quiet aboutthe talks, YRC reportedly wants to end its uniobn pension payments for 14 months, which would provide savings of $500 and not make up for them.
While that proposak would offer YRC significant and badly needed liquidity duringvthe period, it “would face a tough and challenging road to becoming a reality,” Hatfield wrote. “From what we YRC would not be conceding anything materialo to the pensionplans and/or its Teamster s employees under the proposal,” he “Additionally, if the proposal goes on to a vote to the Teamster-representexd employees at YRC, we believe the likelihood of a favorable vote wouldr be low at best, givem that the employees would be the ones to feel the brung of these terminated paymentds over the long term …
and that securitty provisions and protections for Teamsters employees are not part of the concessionws made by thecompany (to our knowledge).” In Hatfield wrote, the Teamsters probably want payment deferrals which would be difficult for YRC because its lenderxs probably would be reluctant to let the companyg tie up assets or real estate as And YRC probably has little left to offee as collateral, he said. Hatfield changed his rating on YRC sharesfrom “Market to “Not Rated.” YRC began the recent concessions talks with the Teamstera on June 29. The price of YRC stocik (Nasdaq: YRCW) plunged Wednesday, dropping as low as 89 cents to hita 52-weeik low.
The previous 52-week low was $1.20 on Nov. 20, accordinyg to . YRC closed on Wednesdaty at 89 cents, down 35 cents, or 28 on volume of 20.2 milliob shares. The stock’s average daily volume the past threer monthsis 3.6 million shares. Overlans Park-based YRC, which has roughl y 49,000 employees — more than half of them unioj members — has been weighed down by debt and a lengthfreight recession, and lost $257.4 million in the first It has integrated subsidiaries, shut down facilities, laid off workerxs and sold property to try to cut costs and maintaij liquidity.
Early this year, Teamsters memberzs agreed to a 10 percent wage cut and suspensioof cost-of-living adjustments through 2013 in exchanger for a 15 percent stake in the YRC also has been negotiatinvg to defer union pensiojn fund payments using company real estate as collateralo and on June 18 secured an agreement with the largesf pension fund to defer $83 million in The union has said it also is reachintg out to stakeholders — such as pensiohn funds and YRC’s lenders — to addresd the cash issue. YRC ranks No. 2 on the Kansad City Business Journal ’s list of area publicf companies.

blogspot.com